Saturday, April 26, 2008

The Government versus Freedom, Part 5

This pamphlet was written in the aftermath of the zoning debate that took place in Houston in the early 1990’s. The ideas remain relevant today. References are listed at the end of part 7.

Lies, Misrepresentations, and Scare Tactics
In the months since the November 1993 zoning referendum, zoning advocates have launched a number of accusations against their opponents. Zoning opponents, pro-zoners said, were dishonest and unprincipled.

They resorted to lies, misrepresentations and scare tactics to win the election. They bought votes with advertising.

First, it should be noted that zoning opponents are not monolithic. For example, one organization argued that "Zoning without a plan is worse than no zoning at all."15 This group argued for even more comprehensive government regulation than the proposed ordinance called for and therefore rejects everything we stand for. We regard such organizations as opponents on the issue of property rights. Consequently, zoning advocates cannot paint their opponents with a wide brush. While we agree that zoning is economically impractical, as many other zoning opponents have argued, we oppose zoning primarily on moral grounds.

When zoning opponents claimed that zoning could be used to segregate minorities and other "undesirables", zoning proponents cried foul. Yet, in Mt. Laurel, New Jersey, zoning was systematically used during the late 1970s and early 1980s to drive the town's small black population out of the community. 16

National surveys regularly find that housing in Houston is among the nation's most affordable.17 While many factors influence the cost of housing, one of the most significant is zoning. In the early 1980's, the Department of Housing and Urban Development studied the costs zoning and building codes impose on housing. The survey involved development projects in three locales: Shreveport, LA; Hayward, CA; and Allegheny County, PA.

The findings were dramatic. In Shreveport, government regulations accounted for 21% of the project cost. In Allegheny County, an additional 24% was added, and in Hayward, the cost increased 33%. The survey found that the primary reason for the additional costs were delays imposed by the various approval processes required by law.

These approval processes require developers to seek government permission to begin a project. Which means, before an individual may use his property as he chooses, he must secure the approval of government bureaucrats.

Under zoning, the developer has no option but to patiently seek the zoning officials' approval and meet their conditions. These conditions can range from playgrounds to senior citizen centers to "public art".18 The costs incurred by the developer-- such as maintaining equipment and inventory, servicing the debt on undeveloped land, legal and permit fees, and the costs associated with the zoning officials' conditions-- are ultimately passed on to consumers.

The government study cited above is not the only evidence that zoning increases the cost of housing.
Phil Rafton, a developer in Southern California, estimates that he could reduce costs by 30% without zoning.19 Former HUD Secretary Jack Kemp regularly used a flow chart to show how regulations add $40,000 to the cost of a new home in Orange County, California.

An article in the May 9, 1989 issue of The Wall Street Journal addressed the issue of high housing costs. Less regulation, the article stated, leads to lower housing costs. In North Carolina, for example, a developer can build a 4-bedroom house for $95,000 after a 3 to 4 month approval process. In New Jersey, the same home would cost $230,000 and be delayed by an average of 3 years. While other factors contribute to the higher costs in New Jersey, the bureaucratic delays and regulatory requirements are a major reason for the dramatic difference.

The costs of zoning are not always computable in dollars and cents. In 1983 a New Jersey developer began planning a 3,300 unit condominium. The units would sell for $130,000, a price which 35% of the area's families could afford. Bureaucratic barriers delayed the project for six years, increasing the price to $240,000 per unit, a price which only 18% of families could afford. Which means, government regulations virtually halved the affordability of this housing.

By imposing additional costs on developers (and hence consumers), zoning makes housing less affordable. Those most affected by this reduced affordability are the poor, the middle-class, and first-time buyers. Unfortunately, these individuals seldom realize that zoning is the reason they cannot afford to purchase a home. They are the hidden and voiceless victims of zoning.

Higher housing costs are not limited to single-family homes. The above example shows that zoning also increases the cost of condominiums. Zoning has the same affects on apartment complexes.

Bureaucratic delays, legal and permit fees, "impact fees", etc. increase the costs of developing apartment projects. These costs must eventually be passed on to consumers in the form of higher rents.

Zoning is frequently used to limit the density of apartment complexes. Reduced density means higher costs for the developer, as well as fewer apartments available for renters. We should note that at least one zoning advocate has suggested using zoning to restrict "development densities", i.e., to control the freedom of developers to build apartment complexes. 20

The burdens and costs associated with zoning and other regulations not only increase the cost of housing, but also discourage its creation. Investors often decline projects because of the costs--either real or potential-- they will have to accept.

It is neither a scare tactic nor a lie to take an individual's ideas seriously. The debate over zoning is a serious intellectual issue, which will impact the life of every Houstonian. We have demonstrated that zoning has a specific nature, that specific principles underlie zoning. We have demonstrated that those principles logically lead to the use of governmental force to impose a community's values upon individuals. We have provided examples of these principles in action, in other cities and in Houston.

Zoning advocates have called such arguments and examples lies, misrepresentations, and scare tactics. They have refused to refute our arguments, but instead responded with angry, unsubstantiated assertions.
When confronted with the problems zoning has caused in other cities, pro-zoners respond that those are other cities, and they don't have "Houston-style" zoning. In other words, those problems may be a result of zoning in Miami, Detroit, and Chicago, but that is Miami, Detroit, and Chicago. They don't have "Houston-style" zoning. In other words, zoning advocates believe that there are no principles which underlie zoning.

Any attempt to interject principles into the debate has been met with angry accusations. Zoning advocates believe that it is invalid to use examples from other cities, because Houston will have a "unique" form of zoning.

But there are principles which underlie zoning, and those principles can be used to predict the consequences of "Houston-style" zoning, "neighborhood" zoning, or any of the variations zoning advocates can concoct. Zoning, by its very nature, is a violation of property rights, and destructive to human welfare.

While zoning advocates have responded to principled arguments with accusations of lies and misrepresentations, they have engaged in their own misrepresentations.

Zoning proponents would have us believe that opening a business near a residential area violates the property rights of the residents. They would have us believe that "trash trees" violate the rights of nearby residents. As we have argued, this is false. Zoning advocates are using such alleged rights violations to justify their own proposal to violate property rights-- not on a neighbor-to-neighbor basis, but on a massive city-wide scale. They are proposing to bring harassment to new levels by institutionalizing it in the form of zoning.

To understand this, consider the following quote from a handout from Jim Greenwood's Ad Hoc Task Force on Planning and Zoning titled "Proposed Goals for Planning and Zoning Houston": "Planning and zoning should allow landowners the opportunity to use their land as desired, but with consideration for its impact on the value and quality of life of neighboring areas and the City's comprehensive plan."

Which means, when an individual's desired land use differs from the City's plan, or that land use is determined to have a negative impact (whether real or imagined) on neighboring areas, the individual's desires are to be ignored. Which means, an individual may not in fact, use his land as he desires-- land will be used as the City desires.

Consequently, to claim that zoning permits property owners to use their property as they desire, is not only incorrect, but actually the exact opposite of the truth.

Herman Lauhoff, in an OpEd article in The Houston Post in November 1994, wrote that anti-zoners outspent zoning proponents in the November 1993 referendum by 3-to-1.21 Similar claims had been made previously by zoning advocate Brandy Wolf, 22 in an editorial in The Houston Post, 23 by Post columnist Tom Kennedy,24 by Chronicle columnist Lori Rodriguez, 25 and others.

Each of these individuals has conveniently ignored the tens of thousands of dollars spent by the city to conduct zoning hearings and workshops, to print literature, to draw zoning maps, etc. The budget for the Planning and Zoning Commission in 1992 alone was over $6 million.

City officials were not neutral on the issue of zoning-- they overwhelmingly favored it. Their efforts to "educate" the public were entirely one-sided. Which means, every dollar spent by the city was in effect a dollar spent in favor of zoning. Furthermore, the money spent by the city came from the taxes of all Houstonians, including those who were opposed to zoning and those indifferent on the subject.

The fact is, the approximately $500,000 which The Houston Post reported spent by zoning opponents in the 1993 campaign pales in comparison to the money spent by zoning advocates.26 The actual amount is impossible to determine because the entire process was woven into the fabric of government. Zoning advocates refuse to acknowledge that much of the money used to support their cause came from those who oppose it, while zoning opponents were required to raise all of their funds through voluntary contributions.

If zoning advocates are so principled to decry "lying and scare tactics," they should have the integrity to pay for their own campaigns. Instead, they have forced voters to provide financial support, voters who have consistently rejected them.

Furthermore, the entire discussion of how much money was spent to oppose zoning is based on the false premise that spending money to defend one's rights is immoral. Those who are the victims and potential victims of government regulations have every right, in fact a moral obligation, to defend their values with whatever means they have available. What is immoral is not that they spend that money, but that they are required to do so to protect their freedom. Consequently, such individuals are financially victimized even before zoning is enacted (not only by being required to spend money to defend their rights, but also by having their tax dollars used to support a policy they oppose). Such individuals have a moral right to demand compensation for every penny spent.

Zoning advocates would like us to ignore the horrors of zoning in other cities. They want to prevent principles from entering the debate. They want to ignore facts, while simultaneously calling their opponents dishonest. The truth is, by ignoring the principles which underlie zoning, its advocates have blinded themselves to the destructive consequences of the ideas which they advocate.

© J. Brian Phillips and Warren S. Ross 2008

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